Hoshin Kanri for Agile – Toyota’s lean policy deployment translated to Agile – is also an excellent tool to align Squad backlog with their Tribe’s purpose in an Agile organization. In my previous post on Hoshin Kanri for Agile, I introduced an innovative way to apply Hoshin Kanri to align the mission of squads with the purpose of their tribe. But the effect carries on even further: the entire backlog of the squads will remain in line with the mission and purpose. Again, this requires a slightly different use of the principles of Hoshin Kanri.
Agile squads work in sprints. At the end of each sprint, they deliver fully functional solutions for their customers. These solutions should be in line with their mission. And this mission should be in line with their tribe’s purpose. Innovative companies like Spotify use this Agile way of working to continuously deliver improved user experiences. Their product range is relatively simple, and their services are fully digital. But how will this work when traditional companies, banks for instance, transform into digital agile companies? Hoshin Kanri is the right tool for the job.
Hoshin Kanri Policy Deployment starts at a strategic level:
Formulate break-through goals for 3 to 5 years ahead. These are the goals that will make a real impact on the purpose of the tribe.
Translate these break-through goals into one-year goals. This is the annual plan for the tribe, with challenging but achievable goals.
Translate these goals to Squad Missions. These missions describe the processes that need to be improved.
Determine which metrics will show the progress of the improvement.
Then, the squad gets to work. But not by creating a backlog directly from their mission. The mission should be used as a starting point for improvements. The squad has a set of proven Lean improvement techniques at their disposal. From large scale to small scale (and from low to high frequency):
(Re)design, e.g. Value Stream Mapping, Design for Six Sigma or Washing Lanes
DMAIC projects, executed by green- and blackbelts
KAIZEN improvements, team improvement sessions
Kata improvement, weekly improvement as a habit
Hoshin Kanri for Agile
Finally, the backlog is filled from each of these improvements. As each of the improvements are focused on the same strategic priorities, the backlog will be completely in line with mission and purpose.
Hoshin Kanri – Toyota’s Lean take on policy deployment – is an excellent tool to align Squad missions and Tribe purpose in an Agile organization. When traditional organizations in Financial Services transform into Agile organizations, new challenges will arise. One of these challenges could well be: how to keep the improvement efforts of all the autonomous Squads aligned with the Tribe’s purpose?
Hoshin Kanri Policy Deployment starts with formulating break-through goals for 3 to 5 years ahead. These are the goals that will make a real impact on the purpose of the tribe. Second step is to translate these break-through goals into one-year goals. This is the annual plan for the tribe, with challenging but achievable goals. Third step is to translate these goals to Squad Missions. These missions describe the processes that need to be improved. Final step is to determine which metrics will show the progress of the improvement. Translating the squad’s improvement goals into KPI’s and targets makes it possible to steer on output and still make sure things are moving in the right direction. The picture below illustrates this.
Hoshin Kanri aligns squads with the tribe purpose
The outcome of the Hoshin Kanri Policy Deploycement gets a prominent place on the “Plan” wall in the Obeya Room of the tribe, and the improvement can start within the squads. Squads can be autonomous, because alignment is ensured through the Hoshin Kanri.
Each squad will get to work improving what needs to be improved. They can use their Improvement Kata for small, incremental improvements. Larger improvements require a Kaizen approach. For problems where the solution isn’t clear, DMAIC projects can be started. And the biggest changes require redesign or innovation. But whatever the approach is, the overall progress can be monitored in the KPI’s. This is show in the second picture.
Hoshin Kanri aligns the improvement efforts of squads
All these elements together ensure that the squads start improving in the right direction. Of course, it wouldn’t be Agile if there wouldn’t be room to make changes along the way. But this shouldn’t be needed too often. All in all, I’m very excited about using Hoshin Kanri Policy Deployment to align autonomous agile squads with their tribe’s purpose.
Recently, I attended a presentation on how Gamification can help Super7 teams to become successful. A talented graduate student had designed a method where super7 teams manage not their actual performance, but instead manage a virtual company.
First, a Super7 team got to choose their virtual business. For instance, a team would choose to become a virtual coffee bar or tea parlor. Their operational results as a Super7 were translated into virtual sales figures and profits. When quality or timeliness would fall behind slightly, this would show up in customers staying away from their virtual company. Excellent service in their real work would boost their virtual popularity and sales. And, the amount of capacity needed to process their real work would determine the costs side of their business.
I can only imagine the fun the teams must have had with this approach. And, the results where great, from what I heard. I hope to share more about the exciting possibilities of applying gamification for Super7’s in the near future. And, could this be a whole new way of engaging scrum teams or agile squads as well?
Many companies are adopting the principles of agile, nowadays. And they often find that their operations departments are ahead in this field. This is because of their experience with Lean and autonomous teams – their experience with Super7 Operations.
So, how do the principles of agile compare to the princples of Super7 Operations?
Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
Welcome changing requirements, even late in development. Agile processes harness change or the customer’s competitive advantage.
Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
Business people and developers must work together daily throughout the project.
Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
The most efficient and effective method of conveying information to and within a development team is face-to-face conversation
Working software is the primary measure of progress.
Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
Continuous attention to technical excellence and good design enhances agility.
Simplicity–the art of maximizing the amount of work not done–is essential.
The best architectures, requirements, and designs emerge from self-organizing teams.
At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.
The principles of Super7 Operations:
The Super7 team has a goal that is relevant for the customer. The Super 7 team can help each other in achieving this goal. The goal is translated daily to a goal for that day. The Super7 team is committed to achieving the daily goal. When problems arise during the day and the daily goal can’t be met, the Super 7 team responses by doing what they can to come as close as possible to the goal. When that isn’t enough to reach the goal, they ask for help from their team manager.
All Super 7 team members have the skills for all types of work. The Super7 Skills-Matrix shows who can do what, and at what skill level. The Super 7 team members are sufficiently flexible in working hours to be able to meet customer demand on busy days.
Team manager steers on output. Manager stimulates the Super 7 team to come up with solutions. Manager is available and helpful when the Super7 asks for help.
The daily rhythm is tuned to the rhythm of the customer requests. There is a fixed schedule for Super 7 team stand-up meetings, focused on achieving the daily goal.
Super 7 team is autonomous in work distribution and who does what. There is a standard way of working. The team can deviate from this standard, as part of an improvement experiment.
The Super 7 team is stimulated to continuously make the daily goals more challenging. Standard norm times are improved and planning is made tighter. This is done though Improvement Kata and Kaizen. As an Improvement Kata habit, a Super7 conducts small experiments, aimed at achieving the next target condition. For larger improvements, they plan a Kaizen event. There is a constructive performance dialogue, based on facts and figures, on all level of the organization.
The Super 7 uses visual management. Daily goal and progress towards this is visible on the Super7 team board. Performance of last period is visible, as is the trend. Running and planned experiments and improvements are visible on the Super7 team board.
The similarities are clear:
Delivering value to the customer is the main priority
Teamwork is key
Flexibility over planning
Face-to-face is the best way
Continuous improvement based on reflection on performance
Because of these similarities, experience with Super7 Operations will facilitate the transition towards agility.
When traditional organizations transform into Agile, they can benefit from their LeanSixSigma experience.
Many traditional companies are looking with great interest at how innovative tech companies are organized. Even in banking, an industry that is known for being conservative, experiments are taking place with Agile Organization:
multidisciplinary squads instead of functional teams,
tribes instead of departments
IT development and business management in close cooperation
Continuous delivery of small changes (sprints) instead of big projects
Lean Six Sigma has been applied in banking for more than a decade. Many banks have their own pool of Lean Experts or LeanSixSigma Blackbelts. As Agile is based on similar principles as Lean and the Toyota Production System, this experience may be very valuable in this transition.
Agile organizations use Agile Coaches, to help the team in the use of the Agile and Lean principles. LeanSixSigma could add to that. For instance:
Put focus on the Voice of the Customer. Challenge the Squads to determine and measure the customer impact of their work.
Make sure the quantitative results of every sprint are visible
Achieve alignment between squad missions, tribe purpose and company vision. This can be done through Hoshin Kanri – a method for policy deployment developed by Toyota and an important Lean method
Accelerate problem solving by applying the Coaching Kata to the squads Improvement Kata, and by applying Analytical Problem Solving techniques from LeanSixSigma
The transformation of classical Back-Offices to Lean Super7 Operations has been an exciting journey so far. The transformation from a top-down functional organization to an Agile organization promises to be even more so.